TL;DR:
- FPF proposes that the Zcash Community Grants (ZCG) committee become an independent committee underneath the FPF umbrella as an interim step towards possible future full independence. (Proposed Actions)
- The ZecHub bounty program is now being administered by FPF through the end of 2024. (Pending Actions)
- FPF will provide fee-based administrative and operational support to unincorporated organizations and discrete projects so that they can maximize their impact in a resource constrained environment. (About FPF)
Proposed Actions:
FPF proposes that the Zcash Community Grants (ZCG) committee become an Autonomous Entity (AE) under the FPF umbrella. This action has been under discussion with FPF and ZCG, and ZCG is in favor of this arrangement as an interim step towards full entity independence. FPF believes the following benefits will be realized by this relationship:
- FPF is eager to work with ZCG and the Zcash community to discuss and implement program and process improvements. Current and potential future resource constraints require a focus on program and process efficiency, accountability, and the ability to have the time and visibility to change tack as circumstances demand. ZCG must continue to evolve into a flexible and scalable program, and FPF is well-positioned to support that evolution.
- As detailed below under “Objectives”, FPF is structured to provide enhanced support to AE’s under the FPF umbrella. This support includes the provision of resources that will ultimately contribute to full entity independence if that is determined to be the ultimate desired outcome.
- Positioning ZCG as an Autonomous Entity (AE) under the FPF will contribute to the decentralization of the Zcash ecosystem, a clear priority for the Zcash Community. This will be achieved through the growth of a new offshore organization (FPF) and the further distribution of a critical ecosystem program (community grants) away from a key ecosystem resource with other critical ecosystem responsibilities, the Zcash Foundation (ZF). In addition, if ZCG is selected to receive a portion of community funding (pending, TBD) that “slice” will be administered by a non-US entity, further contributing to ecosystem decentralization.
- Moving ZCG from under the Zcash Foundation (ZF) will help extend ZF’s resources and assist the organization in focusing on Zebra, FROST, and other community programs.
The annual fee-for-service for year one would be $145,000. This fee includes the cost of support personnel and all required services, including accounting, custody, and operational accounts but excludes the cost of a grants program (Submittable or other, TBD) and ZCG member stipends. Note that the cost of FPF’s annual organizational fees (registered agent, government fees, etc.) will be borne by FPF and will not be passed on to AEs. For reference, the Zcash Foundation’s 2023 ZCG support costs were $221,246 including allocated staff time. That figure does not include $103,510 in ZCG member stipends that were paid by ZF in 2023.
FPF invites the community to provide their input on this proposal.
Pending Actions:
ZCG approved ZecHub’s grant request which includes FPF’s administration of the ZecHub Bounty Program through the end of 2024. ZecHub will retain ownership of the bounty program, its strategic direction, and decisions regarding bounty recipients. FPF will handle only the administration of program payouts and the associated due diligence and accounting activities. This partnership with FPF will strengthen both ZecHub and the bounty program, ultimately benefiting the Zcash Community.
About FPF
Introduction:
The Financial Privacy Foundation (FPF) seeks to address a critical need for operational and financial management support among unincorporated organizations and ad-hoc groups in the cryptocurrency space, with a specific focus on privacy-focused protocols. These organizations, primarily focused on completing technically challenging and innovative products and services, frequently lack the resources to manage their operational and financial affairs effectively. FPF aims to bridge this gap by providing a fully scaled organizational structure and comprehensive back-office support, ensuring these groups can focus on their primary mission and maximize their impact.
About and Mission Statement:
FPF’s mission is to educate and empower individuals and communities to take control of their financial privacy and security, and to promote a fair and equitable financial system that respects personal privacy. One way FPF delivers on this mission is to support other like-minded entities as they scale their operations, providing them with the ability to focus on their core competencies.
FPF is an independent Cayman Islands incorporated non-profit foundation governed by a board of directors and a Supervisor.
Start-Up Funding:
A start-up grant of $250,000 (in ZEC) was provided by the Zcash Foundation. This is an active grant focused on organizational start-up, the provision of an experimental grants program, and several other community-focused deliverables. This grant will cover required FPF organizational fees (gov’t fees, registered agent, etc.) through the end of 2025.
FPF has become a fully functioning non-profit organization with a scalable infrastructure, ready to support any pace of growth.
Objectives:
The overall objective is to provide a comprehensive suite of operations, administrative, and financial management support to Autonomous Entities (AEs) under the FPF umbrella. AEs will be free to focus on their core competencies while being confident that their non-core activities are receiving the attention and expertise they require including:
- Operational Support: Provide administrative assistance, including office management, record keeping, and compliance with regulatory requirements.
- Financial Management: Offer services such as bookkeeping, financial reporting, budgeting, and payment infrastructure to ensure financial transparency and sustainability.
- Capacity Building: Conduct training and workshops to build the operational and financial management skills of unincorporated organizations. Provide resources and support for scaling operations for entities interested in eventually transitioning to fully independent organizational status.
- Resource Optimization: Help organizations optimize their resources and improve their overall operational and administrative efficiency.
Target Beneficiaries:
- Unincorporated organizations with minimal or no operational infrastructure (AEs)
- Ad-hoc groups (time-bound or permanent)
- Incorporated organizations that require project-based support (menu of support options would be limited from those provided to unincorporated entities).
Funding Model (Fee-For-Service Model):
FPF will utilize a fee-for-service model for hosting Autonomous Entities (AEs). FPF will strive to provide comprehensive support services without a profit motive, in-line with our charitable status and mission.
Note: FPF intends to transact in shielded ZEC whenever possible, including contractor payments.
Reporting:
FPF will commit to publishing progress reports on the Zcash Community Forum in the event that FPF provides services to Zcash community entities.
Structure:
FPF will utilize a committee structure to ensure entities have independence in all aspects of their work while enjoying the support of FPF and the benefits of being part of a Cayman incorporated non-profit organization. The basic structure is as follows:
Risks + Mitigation:
- Risk 1: Regulatory risk is inherent in every crypto-focused project. While Cayman has thus far proved to be a friendly jurisdiction there are plenty of examples of abrupt policy and regulatory actions by previously friendly administrations. If actions were taken that reduce or remove the benefits associated with Cayman incorporation, FPF would look to move to a friendlier domicile, putting pressure on the organization’s treasury and personnel focus.
- Risk 2: FPF has accomplished our original goal of securing funding for start-up activities while ensuring surplus funds are allocated for all non-personnel organizational costs through the end of 2025. If these estimated costs were to rise significantly, or if unanticipated expenses were required to be incurred (legal fees, government fees, etc.), FPF would need to secure additional funding.
- Risk 3: FPF is well-positioned to address support and administrative gaps within the Zcash Community. However, there is a risk of centralizing too many projects and services under the FPF entity, which could negatively impact the long-term sustainability of the Zcash protocol. Therefore, FPF must be selective in the projects it undertakes to ensure it remains effective and valuable to the Zcash Community in the future.
- Risk 4: FPF acknowledges that conflicts of interest must be avoided. FPF will take steps over the coming months to address any perceived conflicts.
Conclusion:
FPF will play a crucial role in strengthening the operational and financial capabilities of unincorporated organizations in the Zcash ecosystem and beyond. By providing essential back-office support, FPF will enable these organizations to focus on their core missions, ultimately leading to a more vibrant and effective Zcash Community. We seek the support and collaboration of the Zcash Community to bring this vision to fruition.
